We’ve shared various components of Buffer’s enterprise transparently over time — and one piece we’ve all the time needed to increase on is the place your cash goes while you pay for a Buffer subscription.
We shared a put up about the place your cash went when shopping for a $10 Buffer plan again in 2014 — however it was properly time for an replace.
Quite a bit has modified during the last 9 years, and we wish to share a number of the learnings and insights gained from trying again at our numbers.
We’re additionally comfortable to share a extra sustainable approach of offering this data — our new clear pricing dashboard. You possibly can check with it anytime to see the place your cash goes when buying a Buffer subscription, and even look again at earlier years to see how issues have modified.
How our funds have advanced whereas staying true to our mission
our funds during the last 9 years, you’ll discover fluctuations inside the completely different classes. The most important improve you’ll discover might be our worker bills. Since 2014 our crew has grown from 34 to 78 crew members. These bills have additionally elevated on account of:
- the evolution of our wage system
- lots of our teammates rising into extra senior-level roles (and their pay reflecting this!), and
- our dedication to maintain up with market charges in the case of how we pay our crew.
One other necessary element to notice is how Common Gross sales Value (ASP) and Bills have modified over time. Our Common Sale Value (ASP) in 2014 was $13, whereas our whole Working Prices have been $3,575,897. In 2022, our ASP was $20, and our Working Prices hit $19,757,852. Whereas our whole Working Bills have elevated by 452 % within the final 9 years, our ASP has solely elevated by 54 % throughout the identical timeframe.
For us, that’s a rewarding indication we’ve stayed true to our mission and technique to assist small companies. We’ve got deliberately chosen to not go up-market and serve enterprise clients, however reasonably we’re dedicated to serving to small companies and bold people develop their manufacturers on social media.
A have a look at our pricing historical past
Our ASP additionally displays the modifications we’ve made to our pricing mannequin over time. Right here’s a have a look at how our pricing and plans have modified over time:
A better have a look at the place subscriptions go
Internet hosting
Buffer operates as a software-as-a-service (SaaS) firm. This implies our software program is hosted on the cloud and used over an web connection through an online browser or cell app. Our internet hosting prices embody service suppliers like AWS, Cloudflare, MongoDb, Twitter, and so forth.
Service provider Charges
At Buffer, we depend on Stripe, Google, and Apple for our fee processing wants. Stripe funds make up 98.5 % of our whole income and 83 % of our charges. Google and Apple funds make up 2.5% of our whole income and 17 % of our charges. These platforms are important in simplifying our fee operations by offering a safe infrastructure to course of bank card transactions, deal with a number of currencies, and handle recurring funds with out complicated growth. Safety and compliance are essential to us, and utilizing fee processing instruments ensures the safety of delicate buyer fee data and maintains regulatory compliance.
Salaries + Worker Bills
Worker bills are our largest funds class making up over 80 % of our whole working bills. This class consists of the fee for our crew salaries, payroll taxes, and advantages equivalent to medical health insurance, employer contributions to 401k and pension plans, and persevering with schooling (like conferences, free books, and training!).
Instruments + Operations
We use quite a lot of software program instruments to assist our crew and clients. These embody admin instruments like Slack, Dropbox, Threads, Expensify, and Notion (to call a number of!), plus further instruments like Chartmogul, Mixpanel, and Section.
Every space inside Buffer additionally has numerous instruments to assist their wants like our Advocacy crew that makes use of Zendesk to serve our clients and Advertising that makes use of Buyer.io and Pendo for buyer communication and engagement.
A number of classes of bills assist assist Buffer’s general operations. These embody bills like outdoors providers equivalent to accounting, authorized, and consultants. This class additionally consists of our workplace bills like enterprise insurance coverage, financial institution prices, and web and co-working prices to assist our crew to work wherever they’re happiest.
This class additionally consists of the price of computer systems for our crew. Every teammate is eligible for a brand new laptop each three years.
Retreats
Our journey funds consists of all prices concerned in crew gatherings like retreats and meetups. We purpose to have one company-wide retreat yearly.
Journey is embedded into Buffer’s values—a lot in order that our whole distant crew meets up yearly at numerous spots worldwide. Up till 2016, we had retreats twice a 12 months. However our crew grew so massive over time that it made much more sense to maneuver the gatherings to only annually. Regardless that we absolutely imagine we don’t need to be in the identical constructing (and even on the identical continent!) to do nice work collectively, it’s outstanding to see the affect per week in the identical place has on our crew.
Advertising
Our Advertising funds consists of prices for promoting (i.e., paid advertising on platforms like Google and Meta) and prices to assist work with a content material company and different consultants like those who present providers for app retailer optimization.
Taxes
This class helps the price of gross sales taxes in US states the place we have now reached Nexus (i.e., a enterprise presence in a specific state). We additionally pay VAT in the UK. In years the place we’re worthwhile, this class additionally consists of revenue taxes to the US IRS.
Wanting forward at our future investments
Once we sit up for future years, we anticipate that worker bills will proceed to make up nearly all of our Working Prices. We stay dedicated to paying our crew pretty and equitably (and transparently!). Buffer is what it’s as we speak due to the sturdy dedication of our gifted crew, and our working prices mirror how a lot we worth every crew member who has devoted their work life to constructing one thing particular alongside us. We’ve got plans to evolve our present wage system regularly, and we stay up for the day once we can take away the Value of Residing part of our wage system.
One other merchandise on our minds is that we have now some thrilling updates coming round fairness at Buffer. We hope to introduce an worker buyback program within the subsequent 12 to 18 months as soon as we return to a spot of profitability.
We additionally plan to proceed to spend money on paid advertising. Over the past 18 months, we’ve made an intentional effort to spend money on paid advertising, which incorporates paid adverts primarily by Google Advertisements. Our common Return On Advert Spend (ROAS) during the last 5 months is a major 198 %. We’re additionally working with a number of outdoors advertising consultants to assist with content material for our weblog and Search Engine Optimization (website positioning) work. Our advertising funds has actually grown within the final two years, however we’re seeing this funding repay.
One other space we anticipate we are going to proceed to spend money on is AI. At this level, we have now constructed an AI assistant to generate content material for our clients, and we’re additionally utilizing AI internally for areas equivalent to Engineering and Advertising. There are nonetheless infinite alternatives for AI-powered buyer options, and we are going to proceed to construct upon what we’ve constructed. We additionally foresee that we are going to construct extra superior inside AI instruments to serve our clients higher and proceed exploring how we are able to make the most of AI to increase and enhance the in-app assist expertise.
Lastly, we are going to proceed to spend money on crew retreats and we’re excited that we have now already kicked off preliminary planning for a full firm retreat for 2024. In 2022, we kicked off smaller crew gatherings as a solution to ease again into meet-ups whereas being conscious of Covid publicity. Our 2024 retreat might be our first full firm retreat since 2019, and we plan on budgeting $5,500 per individual (roughly $440,000 whole).
Over to You
What else would you wish to find out about our funds at Buffer? Go away a remark beneath to tell us!
